South Africa is a growing forex trading market. According to some estimates, there are over 200,000 traders in the country and they deposit an average of around $1,000 with their brokers. There is no bigger market for Forex on the continent, and due to the policies of the FSCA, the country’s regulatory body, brokers around the world offer their services to South African clients.
If you are one of these clients, it might be a bit difficult to choose a broker. Not only are there plenty of vetted companies out there that will be vying for your attention, but there are also plenty of scammers to avoid. It’s important to stick with licensed brokers – and in this article, we’ve listed the 5 most regulated companies in the country. Before describing them, however, a quick introduction to the country’s regulatory framework is in order:
The regulatory regime in South Africa
The country’s markets are overseen by a regulatory body called the Financial Sector Conduct Authority (FSCA). This regulator is not particularly strict, at least compared to its European, British and American counterparts. It doesn’t really set out any formal requirements for a broker, except for the listing of the company on the register that the FSCA operates online. This registry still manages to ensure that in the event of a broker running a scam, you know who to take legal action against – but there are many protections that are not available to clients of licensed brokers. single regulator.
For example, brokers in the jurisdictions we have mentioned are required to provide a certain minimum capital to be allowed to operate in the markets – this amount is different in different jurisdictions, with the EU and UK requiring at least 730,000 € in liquid funds, and states requiring much more – $20 million, to license a broker. The purpose of each of these high demands, however, is the same. They aim to ensure brokers have the necessary liquidity to meet their costs and stay afloat in competitive markets. Brokers in South Africa that are not licensed by these other regulators are not bound by the same rules – there is no guarantee that these companies have the stability to continue providing their services to you!
Of course, the lax regulatory approach also has some advantages over strict regimes in other jurisdictions. For example, the maximum leverage allowed in the EU and UK is 1:30 for FX majors. In the United States, this amount can go up to 1:50 for the asset class. It is reasonable to restrict leverage, as it can be dangerous for the retail client. At the same time, if you know how to handle the increased risk, you can trade with a broker in South Africa, who are not required to restrict their available leverage. The same can be said for bonuses – they are prohibited in most strict jurisdictions, but brokers in South Africa are free to grant them to clients.
Overall, there are certainly pros and cons to lax regulation. Fortunately for customers in South Africa, the FSCA allows them to trade with licensed brokers in other jurisdictions. This allows leading global brokers to offer their services in the market. These companies are already licensed, sometimes in multiple jurisdictions, which protects them from failure and reduces the likelihood of them being a scam to zero. Here are the five most licensed brokers in South Africa, ranked by the number of licenses they have acquired:
The 5 most regulated brokers in the country
The first broker we would like to introduce to you is FXTM. The company is licensed in four jurisdictions – EU, UK, Mauritius and most importantly, South Africa. As FXTM is licensed in the country, the broker’s finger is attuned to its financial markets. When it comes to trading terms, the company is excellent – a small minimum deposit of $50 is required to open an account. This account can use high leverage of up to 1:2000 and receive a number of attractive bonuses. For example, the client who opened an FXTM account can qualify for a series of Forex trading competitions with attractive prizes. The broker offers access to the Metatrader 4 and 5 platforms, which is the best trading software currently on the market. All in all, your money is in good hands with FXTM!
The second broker on our list is FBS – again the broker holds four licenses. The company has a European license due to its office in Cyprus. It also has a license with Australia’s ASIC, as well as an offshore regulator – IFSC Belize. Finally, the company is again approved by the FSCA. The broker offers access to even higher leverage than FXTM – up to 1:3000. The minimum deposit with this one is as low as $1, which is very appealing to clients looking to get their feet wet and trade without significant risk. Once again, the broker offers access to Metatrader platforms, as well as a trading app for Android devices, called FBS trader.
FXCM claims third place in our ranking with four licenses. The company is regulated by regulators in the UK, Cyprus, Australia and South Africa. Its clients can open an account at the low cost of $50 and use leverage as high as 1:400. The broker offers access to Metatrader 4 as well as a surprisingly comprehensive web platform. Copy trading is also available on the web platform.
Fourth, HFM is a licensed broker in five jurisdictions. These are the EU, UK, UAE, South Africa and Kenya. The company has a lot to offer its customers – there is access to an account for just ZAR 70 – around $5, available especially for customers from South Africa. There is also the attractive leverage of up to 1:1000 that they can use. This leverage can be used on both Metatrader platforms. The broker also offers access to copy trading, available on its dedicated platform. The company’s customers can also take advantage of several very attractive bonuses, such as a 100% deposit bonus.
Finally, Saxo Bank is the most licensed broker that operates in the South African market. The company is licensed in over 10 different jurisdictions – it is licensed in Denmark, France, Japan, UAE, UK, Turkey, Hong Kong, Singapore, Switzerland, Australia and in South Africa. This impressive number of licenses is due to the fact that the company is a real bank that also operates as a Forex broker. This means that Saxo Bank is a little more specific than the other brokers on the list and may not be the best choice for all traders. The company has a high minimum deposit of $10,000. It is also a fundamentally different type of broker from the rest of the companies – it is a market maker, while the other companies provide STP and ECN services. Despite this, if you are looking for the most licensed broker in the country, it is Saxo Bank!
The Most Regulated Brokers in South Africa
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